Tuesday, April 24, 2007

Indiana's pre-paid funeral trusts, part 1

A disclosure before going any further - my father is a funeral director. All this means is that I have seen both sides of the pre-need funeral trust issue. My father drummed into me one good, practical use for this kind of trust: it removes the burden from the survivors in selecting the funeral.

What I have learned about funeral trusts since beginning my practice in 1987 is that people think they can put their funeral arrangements in their Wills. No can do. Funeral trusts create the means for people to set out and control their funerals.

In my opinion, estate planning ought to include pre-need funeral trusts. Pre-need funeral trusts provide a valid deduction for Medicare purpose. So for that reasons as well as those I have already given are why I think pre-need funeral trusts need to be included into any estate planning.

Indiana has three statutes relating to funeral trusts: Prepaid Funeral Plans and Funeral Trust Funds Established Before 1982 (IC 30-2-9), Funeral Trust Funds, Payment of Funeral (IC 30-2-10), and Burial Services, or Merchandise in Advance of Need (IC 30-2-13). I will be discussing all of them in other posts.